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THE END FOR IRELAND?

By David Vance On December 7th, 2011

As most people accept, Ireland’s excpetionally LOW corporation tax rate has been integral to attracting FDI and it is an excellent idea for a country to keep tax on business as low as possible. With the Irish economy staggering from crisis to crisis, comes this news….

The leaders of France and Germany have called jointly for eurozone countries to have common corporation and financial transaction taxes. The tax policy would apply only to the 17-member eurozone. France has long complained about Ireland’s low corporation tax rate of 12.5%.

Since Merkozy call the shots these days, and since they clearly seek to end Ireland’s advantage in this area, where to how for Enda and the gang?

14 Responses to “THE END FOR IRELAND?”

  1. This change won’t help France but will likely harm Ireland.

    An unfriendly act.

  2. It always bears repeating: corporations don’t pay tax, they cannot pay tax.

    It’s paid partly by shareholders, partly by customers, but it’s paid mainly by employees. In effect, the very wealthy Merkel and Sarkozy are calling for the average Irish man and woman to be paid less, for political reasons.

    It’s a hateful and wicked idea.

  3. Kenny should resist this as it is critical to Ireland attracting corporations. It is a predatory demand.

  4. There have been few Europeans more enthusiastic about the EU and Euro projects than the Irish have been.

    I wonder if this might be changing.

  5. Of course the inconvenient truth is that many of the companies taking advantage of Ireland’s low tax rate are profits launderers brass plate operations located in the financial centre and employing very few.

    Profits are routed from higher tax zones with the connivance of the Irish state which is the equivalent of an offshore “tax haven” not so much different from Netherlands Antillies.

  6. Peter –

    You mean they screw a brass nameplate onto a door and start paying taxes? Should anyone in the RoI mind that?

    What you overlook is that all firms and employees in the RoI would be affected too, not just the brass plate operations.

  7. No, they screw a brass plate on the door, employ a solicitor as company secretary and pay bugger all. The point is that the ROI low tax rate is only one of many tax advantages which make it the EU’s very own tax haven.

    Yes, the real firms would be affected too, the ones that actually produce stuff and employ people.

    So Ireland will have a decision to make.

  8. The ultimate effect may be that what Ireland loses, Bermuda and Switzerland will gain.

    Please advise how this helps France.

  9. Phantom

    The German chemical company Bayer relocated its main operations to Ireland and made no secret that the tax rate was the reason. The Germans were enraged, and have always been determined to do soemthing about it.

  10. So they can move it once more to Switzerland, as some companies that I know have done, and still get the benefit of low tax.

    Switzerland has poached some Bermuda domiciled business, and I’m not sure that they’ll be as willing to follow EU orders as Ireland now perhaps will.

  11. Phantom –

    The point is construct the singular central state of Europe, governed wholly from Brussels. Whether or not something helps France is beside the point, but if something damages places like the RoI on the road to the nation of Europe, then so be it.

  12. Yes, understood.

    The Quebec auto license plates say ” Je me souviens ”

    IF the weak position that Irish are currently in is exploited too much by the French and Germans, the Irish may remember fairly well too.

    US states compete on tax. Tax competition is not incompatible with being a common entity. And the corporate tax did not get Ireland or Europe into any of its current mess.

  13. US states compete on tax.

    Yes, I understand that Delaware is a real cesspit. Companies registered there can effectively hide their ownership, which is true tax-haven form.

  14. I’m all in favour of tax havens. In fact, I view my job as advising people (and calculating on their behalf) how they can pay the very least amount of tax legally possible, so that they can keep as much of their private property as possible.

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